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ATTORNEYS FOR PETITIONER:            ATTORNEYS FOR RESPONDENT:
ROBERT W. LOSER II,                JEFFREY A. MODISETT
PATRICK M. O'BRIEN,    
            ATTORNEY GENERAL OF INDIANA
BRETT R. FLEITZ
    
STEERS SULLIVAN P.C.                 DAVID A. ARTHUR
Indianapolis, IN                    DEPUTY ATTORNEY GENERAL
                            Indianapolis, IN
______________________________________________________________________________

IN THE
INDIANA TAX COURT
______________________________________________
BULKMATIC TRANSPORT CO.,                                                  )
                                                                                   )
            Petitioner,                                                            ) 
    v.                                                                         ) Case No. 49T10-9508-TA-00085
                                                                                   )
INDIANA DEPARTMENT OF                                                              ) 
STATE REVENUE,                                                                 )
                                                                                   )
            Respondent.                                                            )                 
_____________________________________________________________________________
 

ORDER ON PETITION FOR REHEARING
______________________________________________________________________________

April 6, 1998

NOT FOR PUBLICATION


FISHER, J.

    In Bulkmatic Transp. Co. v. Department of State Revenue, slip op. 49T10-9508-TA- 00085 (Ind. Tax Ct. Feb. 13, 1998), this Court found that the Indiana General Assembly rendered

Ind. Code Ann. §§ 6-6-4.1-4(d), -4.5(d) (West Supp. 1997)See footnote 1 unconstitutional when it limited the availability of the exemptions contained therein to only those motor carriers who use auxiliary or "power take off" equipment (PTO equipment) in Indiana. The Court held that this "in Indiana" limitation violates the Commerce Clause of the United States Constitution. U.S. Const. art. I, § 8, cl. 3 . In its petition for rehearing, the Department contends that the Court erred in holding that Bulkmatic is entitled to a refund of taxes it paid under the unconstitutional law. The Department argues that the words "in Indiana" may not be removed from the law without a declaration that the entire statutory scheme was unconstitutional. Therefore, continues the Department, because the entire scheme was unconstitutional, the exemption should not have been available to anyone and therefore Bulkmatic is not entitled to a refund of taxes it paid. The Court disagrees with this characterization of the Bulkmatic decision and DENIES the Department's petition for rehearing.
    In its opinion, the Court determined only that limiting the availability of the exemption to only those motor carriers using PTO equipment in Indiana was unconstitutional. This Court expressed no opinion regarding any action that the Department or the Indiana General Assembly should take. If the Department chooses, it may give the exemption to all motor carriers equipped with PTO equipment regardless of where the motor carrier uses PTO equipment. In the alternative, the Department may decide that the proper course of action is to deny the exemption to all motor carriers. Regardless, this Court will not dictate the Department or the General Assembly's position. Once the Department or the General Assembly determines what it views as the appropriate course of action, taxpayers are free to appeal to this Court if they feel that those

actions are contrary to law.
    All this having been said, the Department's argument that Bulkmatic is not entitled to a refund is misplaced. The United States Supreme Court has expressly ruled that where a state "penalizes taxpayers for failure to remit their taxes in a timely fashion, thus requiring them to pay first and obtain review of the tax's validity later in a refund action, the due process clause requires the State to afford taxpayers a meaningful opportunity to secure postpayment relief for taxes already paid pursuant to a tax scheme ultimately found unconstitutional." McKesson v. Division of Alcoholic Beverages & Tobacco Dep't Business Regulation of Florida, 496 U.S. 18, 22 (1990).
    As recently as February 23, 1998 the Supreme Court reaffirmed its stance in McKesson in Newsweek, Inc. v. Florida Department of Revenue, 118 S. Ct. 904 (1998) (per curiam). In Newsweek, the Supreme Court overturned a Florida District Court of Appeals ruling that denied a taxpayer a refund. The District Court ruled that the taxpayer could have chosen a "predeprivation" remedy such as filing a tax appeal and paying the disputed amount to the Court instead of the state. However, the taxpayer chose to pay the tax, file a suit, and claim a refund. This is a "postdeprivation" remedy. The District Court concluded that due process was afforded because the taxpayer could have pursued a prepayment remedy but chose not to do so. Id. at 904.
    The Supreme Court held that its opinion in Reich v. Collins, 513 U.S. 106 (1994), forbids "bait and switch" type practices where States appear to offer meaningful postdeprivation relief, and only after the disputed taxes have been paid, reveal that no such remedy exists. Newsweek, 118 S.Ct. at 905. The Department's argument that Bulkmatic is not entitled to a refund ignores

the clear command of McKesson and Newsweek. Therefore, it is without merit.
    For the foregoing reasons, the Court DENIES the Department's petition for rehearing.

                                _____________________
                                Thomas G. Fisher, Judge
                                Indiana Tax Court



DISTRIBUTION:
Robert W. Loser II, Patrick M. O'Brien, and Brett R. Fleitz
Steers Sullivan, P.C.
251 East Ohio Street, Suite 500
Indianapolis, Indiana 46204

Jeffrey A. Modisett
Attorney General of Indiana
By: David A. Arthur
Deputy Attorney General
Indiana Government Center South, 5th Floor
Indianapolis, Indiana 46204-2770


Footnote:     1 In its February 13, 1998 opinion, this Court used the general phrases "motor carrier fuel tax" and "exemption." These phrases were, and are, intended to describe both the tax and surtax imposed under sections 6-6-4.1-4(a) and -4.5(a) and the exemptions from these sections provided in sections 6-6-4.1-4(a) and -4.5(a) respectively. See Bulkmatic Transp., slip op. at 1-2 nn. 1-2.

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